This disclosure relates generally to selecting content for presentation to online system users, and more specifically to determining pricing for sponsored content presented to users via an online system.
Online systems, such as social networking systems, allow users to connect to and to communicate with other users of the online system. Users may create profiles on an online system that are tied to their identities and include information about the users, such as interests and demographic information. The users may be individuals or entities such as corporations or charities. Online systems allow users to easily communicate and to share content with other online system users by providing content to an online system for presentation to other users. Content provided to an online system by a user may be declarative information provided by a user, status updates, check-ins to locations, images, photographs, videos, text data, or any other information a user wishes to share with additional users of the online system. An online system may also generate content for presentation to a user, such as content describing actions taken by other users on the online system.
Additionally, many online systems commonly allow users (e.g., businesses) to sponsor presentation of content on an online system to gain public attention for a user's products or services or to persuade other users to take an action regarding the user's products or services. Content for which the online system receives compensation in exchange for presenting to users is referred to as “sponsored content.” Many online systems receive compensation from a user for presenting online system users with certain types of sponsored content provided by the user. Frequently, online systems charge a user for each presentation of sponsored content to an online system user or for each interaction with sponsored content by an online system user. For example, an online system receives compensation from an entity each time a content item provided by the user is displayed to another user on the online system or each time another user is presented with a content item on the online system and interacts with the content item (e.g., selects a link included in the content item), or each time another user performs another action after being presented with the content item (e.g., visits a physical location associated with the user who provided the content item).
When a conventional online system identifies an opportunity to present sponsored content to a user, the online system identifies various sponsored content items eligible for presentation to the user and performs one or more selection processes to select one or more sponsored content items. Many online systems use an auction as a selection process to select one or more sponsored content items based on bid amounts associated with the sponsored content items eligible for presentation to the user. A bid amount associated with a sponsored content item identifies a maximum amount of compensation a user associated with the sponsored content item is willing to provide the online system for presenting the sponsored content. In an auction performed by a conventional online system, the online system selects a sponsored content item having a maximum bid amount from the sponsored content items eligible for presentation to the user. However, auctions performed by conventional online systems do not account for a user often being willing to provide different amounts of compensation to the online system for selection of sponsored content from the user over sponsored content from different users. For example two users may be willing to compete against each other via higher bid amounts, although both users may benefit from presentation of sponsored content from another user. This may reduce the efficiency of auctions performed by conventional online systems.